WASHINGTON — President Obama hopes to head off a new economic meltdown with his sweeping financial "rules of the road" yesterday. But even his own top economic adviser conceded that no plan — and no president — can see around the curve to avert the next crisis.

Administration officials say their proposal responds to the current crisis — in military terms, it prepares them to fight the last war. But they also insist that a central tenet of their plan is a requirement that from now on financial institutions be better capitalized, the best hedge against another financial collapse.

"I'm not sure that anybody can forecast crises with precision," said Lawrence Summers, director of Obama's National Economic Council. "That's why it's going to be critical to raise capital levels for all institutions."

Aimed at preventing a repeat of the current economic crisis, the worst in seven decades, the changes would reverse a determined campaign begun in the 1980s by President Ronald Reagan to cut back on federal regulations.

Obama's 88-page plan would do little to streamline the alphabet soup of agencies that oversee the financial sector. But it calls for fundamental shifts in authority that would eliminate one regulatory agency, create another and redefine the scope of the powerful Federal Reserve.

The new Consumer Financial Protection Agency would specifically take over oversight of mortgages, requiring that lenders give customers the option of "plain vanilla" plans with straightforward and affordable terms.

It also would make the Fed the regulator of some of the largest and most interconnected institutions in the financial world — an attempt to supervise companies that are so big that if they fail they could do harm to the economy. A separate council, chaired by the Treasury secretary, would watch over the financial system to flag risky new products or trends.

Obama cast his proposals as a middle ground between the benefits and excesses of capitalism. "We are called upon to put in place those reforms that allow our best qualities to flourish — while keeping those worst traits in check," he said.

Obama has set an ambitious schedule for the proposal, pushing lawmakers to adopt a new regulatory regime by year's end.

The key crisis-prevention component of the plan is higher capital standards — if banks and other large institutions have more money, they won't be as vulnerable if their risky bets go bad.

Obama would also place hedge funds and derivatives, the complex financial instruments traded privately in a multitrillion-dollar market and blamed for hastening the financial crisis, under government supervision.

The overhaul ends up eliminating only one agency, the Office of Thrift Supervision, generally considered a weak link. The OTS oversaw the American International Group, whose business insuring exotic securities blew up last fall, prompting a $182 billion federal bailout.

Republicans came out swinging against new government regulation as a job-killing burden on business.

"This plan may slow down job growth at the time that families and small businesses across America need it most," said Rep. John Boehner, R-Ohio, his party's leader in the House.

McClatchy-Tribune News Service contributed to this report.